How to Make A Good Company Great

What makes a company Great? Jim Collins set out to answer this exact question when he and a group of researches started writing the #1 Best Seller Good to Great. Good to Great is a terrific read for anyone interested in creating a great organization.
Good is the enemy of great! Why is Good to Great so Great? Well, Good to Great answers the search for enduring excellence. It is not just a business problem; it's a human problem. The principles within this book can be applied to other organizations, not just business enterprises. Good schools can learn to become great schools. Good government agencies can learn to be great government agencies.

So, just what does make a company great? Collins identifies 6 key attributes:

1. A Great Company Has Level 5 Leadership

Level 5 leaders have goals of building a great company in the next generation, comfortable with the idea that most people won't even know that the roots of that success trace back to their efforts. As one Level 5 leader said, "I want to look out from my porch at one of the great companies in the world someday and be able to say, 'I used to work there.' "

In contrast, the comparison leaders are concerned more with their own reputation for personal greatness, often failed to set the company up for success in the next generation. After all, what better testament to your own personal greatness than that the place falls apart after you leave?

2. First Who, Then What

The main point of this chapter is to get the right people on the bus and the wrong people off the bus before you figure out where to drive it. Letting the wrong people hang around is unfair to the right people. The right people will do the right things and deliver the best results regardless of the incentive system. The second key point is the degree of sheer rigor needed with regard to people decisions in order to take the company from good to great. Good-to-great companies know people aren't your most important asset, the right people are.

Good-to-great companies placed greater weight on character than education, skills, or experience when hiring. The reason: you can teach skills, but character, basic intelligence, work ethic, and dedication to fulfilling commitments are values that are ingrained in a person.

Good-to-great companies were rigorous, but not ruthless. People who did not fit the mold eventually quit or were told to find opportunities elsewhere. The most rigorous discipline was found at the top, where the largest burden of responsibility lies.

Other attributes of great companies include:

3. Confront the Brutal Facts (Yet Never Lose Faith)
4. The Hedgehog Concept (Simplicity Within the Three Circles)
5. A Culture of Discipline
6. The Flywheel and the Doom Loop